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Can the Debt Recovery Tribunal (DRT) grant a stay order on an auction?
08-Jul-2024 (In Recovery Law)
You should file an application under Section 17 of the SARFAESI Act to the DRT seeking an interim stay of the e'auction; the DRT has power to grant stays and to impose reasonable conditions (including a deposit), but the Supreme Court struck down any blanket 75% pre'deposit requirement as unconstitutional in Mardia Chemicals Ltd. v. Union of India [https://www.courtkutchehry.com/judgements/656384/mardia-chemicals-ltd-vs-union-india-uoi-and-ors/] and the Tribunal's power to impose reasonable conditions was explained in Canara Bank v. M. Amarender Reddy [https://www.courtkutchehry.com/judgements/685030/canara-bank-vs-m-amarender-reddy/]; if the DRT insists on a deposit you must normally exhaust the statutory remedy (DRT/DRAT under the SARFAESI Act) because the Supreme Court has held that writ jurisdiction should not be used to short'circuit the Section 17 remedy (G. Vikram Kumar v. State Bank of Hyderabad & Ors.) [https://indiankanoon.org/doc/126147244/]; see SARFAESI Act, ss.13 & 17 for the statutory scheme [https://legislative.gov.in/sites/default/files/A2002-54.pdf].
Yes, a Debt Recovery Tribunal (DRT) in India can issue a stay order to temporarily stop recovery actions like the auction or sale of a borrower's property. If a borrower feels that a bank?s recovery steps under the SARFAESI Act are unfair or premature, they can file an application before the DRT to challenge those actions. While reviewing the case, the DRT has the power to grant a stay, offering temporary relief.
The fee to apply for such relief at the DRT depends on the amount of debt involved:
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For debts up to Rs 10 lakhs, the fee is Rs 12,000.
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For debts above Rs 10 lakhs, the fee is Rs12,000 plus Rs 1,000 for every additional Rs 1 lakh (or part of it) beyond Rs 10 lakhs, up to a maximum of Rs 1,50,000.
Sometimes, the DRT may ask the borrower to deposit a part of the outstanding amount as a condition for granting the stay.
It may be possible to seek a stay from DRT with no deposit up to the second hearing date of 22.2.2017. However, this will depend on the specific circumstances of your case and the discretion of the DRT. It is also possible to approach the High Court if the DRT poses a deposit clause, but again, this will depend on the specific circumstances of your case.
It is important to note theselegal proceedings can be complicated and may require careful consideration. It is advisable to seek legal counsel from a qualified lawyer with proper disclosure of facts and related documentsto fully understand your legal options and potential outcomes.
Please let us know if you have any further questions or concerns.
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